A BILL

TO AMEND CHAPTER 11, TITLE 40, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO PROFESSIONS AND OCCUPATIONS, BY ADDING ARTICLE 3 SO AS TO PROVIDE PROCEDURES FOR RIGHT TO CURE NONRESIDENTIAL CONSTRUCTION DEFECTS BEFORE A CIVIL ACTION OR OTHER REMEDY PROVIDED BY LAW OR CONTRACT MAY BE INSTITUTED OR CONTINUED.

Amend Title To Conform

Be it enacted by the General Assembly of the State of South Carolina:

SECTION 1. Chapter 11, Title 40 of the 1976 Code is amended by adding:

"Article 3

Notice and Opportunity to Cure

Nonresidential Construction Defects

Section 40-11-500. This article may be cited as the 'South Carolina Notice and Opportunity to Cure Nonresidential Construction Defects Act'.

Section 40-11-510. As used in this article:

(1) 'Action' means a civil action in any forum, including an arbitration proceeding, for damages or indemnity asserting a claim for damages, injury, or loss arising out of an alleged defect, act, or omission relating to the design, construction, or condition of the alteration, modification, renovation, or repair of a nonresidential building or structure upon real estate including, but not limited to, utility systems, the boring, and equipping of wells, the preparation of plans, specification, and design drawings, and the work of making the real estate suitable as a site for the building or structure, surveying and staking, the grading, bulldozing, leveling, excavating, and filling of land including the furnishing of fill soil, the grading and paving of curbs and sidewalks and all asphalt paving, the construction of ditches and other drainage facilities, the laying of pipes and conduits for water, gas, electric, sewage, and drainage purposes, and the disposal of any construction and demolition debris, as defined in Section 44-96-40(6) including final disposal by a construction and demolition landfill of nonresidential property.

(2) 'Claimant' means a person or entity who asserts a claim against a contractor, subcontractor, supplier, or design professional concerning an alleged defect, act, or omission relating to the design, construction, or condition of the alteration, modification, renovation, or repair of a nonresidential building or structure upon real estate including, but not limited to, utility systems, the boring, and equipping of wells, the preparation of plans, specifications, and design drawings and the work of making real estate suitable as a site for building or structure, surveying and staking, the grading, bulldozing, leveling, excavation, and filling of land including the furnishing of fill soil, the grading and paving of curbs and sidewalks and all asphalt paving, the construction of ditches and other drainage facilities, the laying of pipes and conduits for water, gas, electric, sewage, and drainage purposes, and the disposal of any construction and demolition debris, as defined in Section 44-96-40(6), including final disposal by a construction and demolition landfill of nonresidential property.

(3) 'Construction defect' means a deficiency in or a deficiency arising out of the design, specifications, surveying, planning, supervision, or construction of nonresidential improvements that results from any of the following:

(a) defective material, products, or components used in the construction of nonresidential improvements;

(b) failure to substantially comply with applicable building codes in effect at the time of construction of nonresidential improvements;

(c) failure of the design of nonresidential improvements to meet the applicable professional standards of care and applicable building codes at the time of governmental approval of the design of nonresidential improvements;

(d) failure to construct nonresidential improvements in accordance with accepted trade standards for good and workmanlike construction at the time of construction; or

(e) failure to comply with applicable building codes. Substantial compliance with the applicable building codes in effect at the time of construction conclusively establishes construction in accordance with accepted industry trade standards with respect to all matters specified in those codes.

(4) 'Contractor' means a person licensed or registered pursuant to the provisions of Chapter 11, Title 40, who is engaged in the business of designing, developing, or constructing nonresidential properties.

(5) 'Design professional' means a person licensed or registered pursuant to the provisions of Title 40 as an architect, landscape architect, engineer, or surveyor.

(6) 'Nonresidential property' means any property, building, structure, or improvement to real property that is not a dwelling as defined in Section 40-59-820.

(7) 'Serve' or 'service' means personal service or delivery by certified mail to the last known address of the addressee.

(8) 'Subcontractor' means a contractor who performs work on behalf of another contractor in the construction of a nonresidential property who is licensed or registered pursuant to the provisions of Title 40.

(9) 'Supplier' means a person who provides materials, equipment, or other supplies for the construction of a nonresidential property.

Section 40-11-520. If the claimant files a civil action or initiates an arbitration before first complying with the requirements of this article, on motion of a party to the action, the court or arbitrator shall stay the action until the claimant has complied with the requirements of this article.

Section 40-11-530. (A) The claimant must serve a written notice of claim on the contractor, subcontractor, supplier, or design professional. The notice of claim must contain the following:

(1) a statement that the claimant asserts a construction defect;

(2) a description of the claim or claims in reasonable detail sufficient to determine the general nature of the construction defect; and

(3) a description of the results of the defect, if known.

(B) The contractor, subcontractor, supplier, or design professional must advise the claimant, within fifteen days of receipt of the claim, if the description of the claim or claims is not sufficiently stated and shall request clarification.

Section 40-11-540. (A) The contractor, subcontractor, supplier, or design professional has sixty days from service of the initial notice of claim to inspect, offer to remedy, offer to settle with the claimant, or deny, in whole or in part, the claim regarding the defects. Within sixty days from the service of the initial notice of claim, the contractor, subcontractor, supplier, or design professional shall serve written notice on the claimant of the contractor's, supplier's, or design professional's election pursuant to this section. The claimant shall allow inspection of the construction defect at an agreeable time, during normal business hours, to any party, if requested pursuant to this section. The claimant shall give the contractor, subcontractor, supplier, or design professional reasonable access to the property for inspection and if repairs have been agreed to by the parties, reasonable access to effect repairs. Failure to respond within sixty days is considered a denial of the claim.

(B) The claimant shall serve a response to the contractor's, subcontractor's, supplier's, or design professional's offer within ten days of receipt of the offer.

(C) If the parties cannot agree to settle the dispute pursuant to this article within ninety days after service of the initial notice of claim on the contractor, subcontractor, supplier, or design professional, the claim is considered denied and the claimant may proceed with a civil action or other remedy provided by contract or by law.

(D) An offer of settlement, repair, or remedy pursuant to this section is not admissible as evidence in any proceeding.

Section 40-11-550. (A) This article does not apply to actions arising out of claims for personal injury, death, or both.

(B) South Carolina Court Administration is directed to develop a designation on the civil action cover sheet which indicates whether a stay has been granted for a civil action filed pursuant to this article.

Section 40-11-560. Notwithstanding the provisions of this article, a person may file and perfect a mechanic's lien in accordance with Chapter 5 of Title 29 of the South Carolina Code, and nothing in this article shall affect or impair a person's ability to preserve and protect his right to file, perfect, or foreclose on a mechanic's lien."